Video-on-demand, one of the home entertainment industry’s big hopes, is unlikely to take off until equipment networks improve, according to industry analysts, even though a large number of media groups are launching VOD services this year.
The media research team at Deloitte believes that video downloads are likely to “encounter some challenges in 2007”, because of slow download times for most broadband customers, particularly when downloading to PCs.
Other industry analysts said that the size of the film download market in Britain is still relatively small. Screen Digest, the media market and research analysis group, expects the film download market to be lucrative in a few years’ time, but said that it will take time for it to produce substantial revenues. Screen Digest expects the market in the UK to be worth £2.6 million in 2007 — up from £400,000 in 2006 — £8.4 million in 2008 and £ 28.9 million in 2009.
Deloitte said that in 2007, on a typical two Mbit/s DSL network, it can take one minute to download each minute of a movie. The Deloitte analysis said: “A three-hour thriller may take 180 minutes or more to arrive. A high-definition video, on a one Mbit/s DSL connection, could take the best part of a whole day to download. There may then be further delay as the PC writes the movie file to the hard drive.”
The analyst research comes as a growing number of media groups have launched video-on-demand services, exploiting their back-catalogues. Channel 4 was one of the first big broadcasters to make all its commissioned content available on demand on its website, called 4oD. BT launched its long-awaited BT Vision last month.
Deloitte added that in 2007 there is likely to be a rise in the use of Internet-based applications such as VoIP, email and online gaming. “If several of these services are used simultaneously within a household, video download speeds could collapse,” Deloitte said.
“Thus, it may be that for DSL subscribers wanting instant access to blockbusters, the local store may be the most immediate route to satisfaction.”
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